How to Save Money While Working in a Bad Economy

Why Do Some Financial Experts Believe That Saving Money Makes a Bad Economy Worse?

Some experts maintain that saving money only makes a bad economy worse. As you might imagine, this is a controversial theory, particularly with the rest of us feeling great uncertainty during these periods. There is, however, a basis for this theory.

One of the major components of a bad economy is the lack of spending by individuals and businesses. People don’t buy products, services, and strictly reduce all discretionary spending. Businesses don’t buy inventory, new locations, machinery, or technology since sales are down. A complete Catch-22 condition, this lack of across-the-board spending helps perpetuate the already downward spiraling economy.

These proponents will happily tell you that if you actually start to increase your savings accounts, you further escalate the downturn by removing more money from the national economy. With less money in circulation, the situation only worsens.

This theory actually works on paper. Increased spending is what eventually helps reverse the bad economy. But – we don’t live on paper, do we. We live in the real world. If we fear being downsized, laid off, or losing our job if our employer fails to survive, we have a responsibility to reduce and manage our personal budget with tenacity. It is smart to save as much money as possible and reduce expenses wherever we can. Here are some ideas to consider while you’re still working during a bad economy.

Some Ways to Save Money While You’re Working

As always, the most simple and logical ideas work best. Saving a little at a time in a variety of areas can accumulate to much larger savings over time. Modest expense reductions, when added together, will make a measurable difference in balancing your personal budget.

• Save money on lunches. Does anyone have the time for a two hour lunch any longer? Few of us have that luxury in this decade. However, saving a large amount of money by forsaking a long lunch at a fine restaurant is more than counter-balanced by the money you can spend visiting local fast food restaurants. In addition to the documented long-term health risks of a regular diet of fast food, your pocketbook suffers, too. Consider preparing a healthy, tasty, and nutritional lunch at home and bring it to work. You’ll save money and enjoy a wonderful lunch – take two hours to savor it, if you can find the time.
• Restrict your coffee shop visits. Almost everyone has a friend who seemingly cannot pass a Starbucks, Dunkin’ Donuts, or another coffee shop without visiting. Whether you favor a small black coffee or 32 ounce super lattes, constant visits to coffee shops can put a dent in your budget. Consider making your coffee – just the way you like it – at home and bring a bucket with you to work. Enjoy your coffee on your way to and after you arrive at your workplace. Your bank account will also be pleased. If you spend only $5 per weekday at coffee shops, every month you’ll add around $100 to your bank account.
• Carpool whenever possible. Most of us are aware that carpooling reduces our carbon footprint, saves fossil fuels, and is a wonderful to help our environment. However, during a bad economy, it is alright to be a bit selfish. Carpooling might save you up to 50% of your auto fuel expenses. You’ve seen a lot of sunsets if you remember when gasoline was $.35 to $.75 per gallon. However, at $2 to $3 per gallon, you can save substantial dollars on a continuing basis.
• Walk or bicycle to work if you can. Why not save 100% of your auto fuel bill, if possible. Unless you enjoy free parking at your workplace, you’ll also save parking fees. Obviously, you’ll enjoy an additional benefit: Staying in good shape. Your bank account will get in better shape, too.

There is not one activity that will typically save you large sums of money. However, just as turning a light off in empty rooms, over time, can save a lot of energy, using some of these tips to save you in a variety of ways can add up to significant dollars. In a bad economy, every little bit helps, and accumulating many little bits often become a mega bit.